What morale challenges employers should expect with the overtime rule

Dive Brief:

A potentially negative outcome of the Department of Labor's new overtime rule will be letting current salaried employees know they are going to be paid hourly, according to SHRM. As has been widely reported, the FLSA salary threshold for employees who are exempt is going up from $23,660 to somewhere between $45,000 and $50,440 (the original Labor Dept. figure).
The new overtime rule, which may be made public this month, will force employers nationwide to notify exempt workers that their salaries don’t meet the federal threshold to remain exempt, which means that for many, it will be the first time they must keep track of their time on the job, according to SHRM.
Alice Kilborn, SHRM-CP, a consultant on workplace litigation prevention in Albuquerque, N.M., told SHRM that employers can expect many employees to "feel hurt and under-appreciated."

Dive Insight:.

The change also could affect benefits, because employers could have different benefit plans for hourly vs. salaried workers. Marie LaMarche, SHRM-SCP, labor relations division director for Tacoma, Wash.-based CHI Franciscan Health, told SHRM that things such as paid time off or vacation could be affected, in either direction (better or worse for the new non-exempt employee).

The article goes on to offer tips around issues such as communications, employee business travel, and dealing with company property (mobile devices, laptops etc.), potentially critical aspects of the new rule. For example, employers may require workers to leave their company-issued hardware in the office so they are not tempted to work after hours, driving up overtime costs, though overtime typically will need to be approved in advance.

Regardless, Kelly Stiles, HR manager for the city of Unalaska, AK, has little doubt productivity will take a hit.

“There will be no avoiding the need to shift priorities, tasks and responsibilities, which will have a direct impact on productivity,” Stiles told SHRM. “I am all for fair treatment and fair pay, but there is also the need to operate efficiently and cost-effectively. And I still believe the overall impact is going to be on employee morale which, goes without saying, will impact almost every area of the organization.”